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Condition for liquidation:
The liquidation itself may render a charge over the company's assets void in any of the following circumstances:
(a) the charge was not registered within 42 days of creation as required by s.96;
(b) the charge is a floating charge created within the period of 12 months before commencement of liquidation (paragraph 24 below), or
(c) the charge is void as a fraudulent preference (paragraph 28 below).
If the charge is void the receiver's powers and appointment lapse and he must account to the liquidator for his transactions and the assets of the company still under his control.
If there are not sufficient other assets to pay preferential debts those debts are paid out of property subject to a floating charge in priority to that charge. It is the duty of the liquidator to ensure that debts are paid in their due order of priority.
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